Cash For Clunkers Runs Out Of Gas

Dealerships Rush To Close Deals Before Program Ends Late Monday

The wildly popular Cash for Clunkers program will end Monday night, leaving South Florida auto dealers grateful but a bit concerned.

Dealers are thrilled for the program's quick boost in sales but worried about when they'll be paid for rebates and unsure about sales Tuesday.

U.S. Transportation Secretary Ray LaHood announced Thursday afternoon that the program will end, its $3 billion in funds unexpectedly depleted in just one month. The government will process applications filled out before 8 p.m. Monday, and those rejected can be re-submitted, he said.

That gives drivers with clunkers four days to unload gas guzzlers for federal rebates of up to $4,500 on new more fuel-efficient cars or trucks.

David Mathews, group general manager at Toyota of Hollywood and Hollywood Scion, is bracing for a hectic weekend and scrambling to find more Corollas and Scions.

Toyota is the top seller in the program that President Barack Obama has called "successful beyond anybody's imagination."

Mathews' dealerships have closed 182 clunker deals since the rebate program began July 24, boosting his business by more than 50 percent from a typical month. But paperwork has been a nightmare, with just two rebates reimbursed by the government so far - both on Thursday, he said.

"It's been great, and it's been horrible," Mathews said. "Great to see people in the dealerships smiling again, but the actual processing of these car deals, horrible."

Dealer groups had been pushing for a final date, instead of a total dollar amount, to wind down the clunker program. "You don't want to be the last dealer in line when the money is gone," said Rick Baker, president of the South Florida Automobile Dealers Association.

Jim Riger, general sales manager at Lipton Toyota Scion of Fort Lauderdale, will be sad to see the program end. He figures the rebate offer boosted sales "at least 30 percent" at his dealership, with more than 80 clunker deals closed and dozens of other cars sold outside the program.

"People are coming in with cars that they would have traded in for $100 or $1,000, and they're getting $3,500 or $4,500 instead," Riger said. Drivers who don't qualify have been buying, drawn in by the buzz over clunkers but finding other manufacturer and dealer incentives available, he said.

"It's brought a lot of people into the game that wouldn't be," Riger said. He is confident that some sales momentum will carry over after the government rebates run out.

Still, Riger has his headaches. The government has yet to reimburse a single rebate on more than $250,000 owed on his clunker deals, he said.

Transportation officials said they are tripling the staff to more than 1,000 people to handle the crush of rebate applications that overwhelmed their workers and computers. As of Thursday, the agency said it had processed 37 percent of roughly 457,000 reimbursement requests, but did not specify how many were approved or rejected.

Obama, speaking on a radio talk-show, described the government's logjam as a "high-class problem to have."

Dealers wonder about what will happen once the rebate offers end.

Many hope the momentum from the clunker stimulus will carry over, but some wonder whether the sales jump simply robbed from future business.

"We're out of the doldrums," Baker said of the auto industry. "But did we steal sales from the future? I don't think much."

Before the clunker program, U.S. sales of new vehicles were scraping along at levels not seen since 1982 - below 10 million a year. The $3 billion in rebates should add about 750,000 clunker deals, bumping up U.S. sales beyond 11 million this year.

But no one sees a return to pre-recession levels of 16 million in annual sales any time soon, not even in the next few years.

"I think we'll slowly rise and then stay at the 13.5 million or 14 million level," Toyota manager Mathews said. "It's like the housing market. It won't get back to those crazy heights again, but it will level off."

In the meantime, many dealers are busy offering clunker rebates before they end Monday, happy for the extra boost.

Said Riger at Lipton Toyota Scion: "I would love it to go on forever."

Doreen Hemlock can be reached at dhemlock@sun-sentinel.com or 305-810-5009.

INFORMATIONAL BOX:

Cash for Clunkers details

The Consumer Assistance to Recycle and Save Act program provides rebates up to $4,500 to help people buy or lease new, more fuel-efficient vehicles from participating dealers. Rebates are limited to one per person, and leases must extend for at least five years.

The trade-in vehicle must be:

Drivable

Insured and registered in the same owner's name for the past year

No more than 25 years old

Rated to get no more than 18 miles per gallon, city and highway, for cars

The new vehicle must be:

Priced below $45,000

Rated to get 22 miles per gallon for cars and 15-18 miles per gallon for other vehicles

For information, go to cars.gov or call 866-CAR-7891.

INFORMATIONAL BOX:

Best sellers

Top cars bought under Cash for Clunkers

1. Toyota Corolla

2. Honda Civic

3. Ford Focus

4. Toyota Camry

5. Toyota Prius

* Data as of Tuesday.

Program details

Find out if your car qualifies for a Cash for Clunkers rebate of up to $4,500. Page 2